Page 42 - Banking Finance June 2020

ARTICLE

dimension in the Banking Sector inclusiveness promoting be the part of change since change is imperative has to be
competition among the domestic Banks with foreign Banks addressed in every stage.
created level playing field for everyone . Continuous
Innovation of new services, out of box strategic approach The Efficiency Ratio matrix is also very important to be
and earning customer loyalty will be the key indicator of addressed simply the how much cost Bank is incurring to get
survival and success in the dynamic changes in the banking revenue. Digital changes the paradigm of business process
sector . has made the scenario faster , eliminated lot of repetitive
work shaved large part of cost structure and add value into
AI( Artificial Intelligence) will be off course key parameter system will decide the future of banking industry.
and data analytics for better decision on income estimation,
standard of living, credit worthiness, problem resolution, Another important segments what Banking sector needs to
financial planning, future income planning, personal touch and target that is millennials roughly 40% of the entire
relationship and connect, seamless services, personalised customer base heavily engrossed with social medias sites
data availability and designing for the better service, and highly educated, conscious and knowledgeable and
improved human interaction, innovation, bank should not highly digital savvy hence bank should be also geared up and
be settling down on the status quo, close to 90% of customer tuned to that extent to deal with such sophisticated class
leaves bank becoz of poor services and no personal touch. of people.

Digitalization bridges the gap in cross functional activities Recent crisis in PMC BANK of Mumbai & YES BANK which
helps to collaborate and articulate the multi-dimensional and is resultant of serious lapsation of compliance, serious
directional issues to stitch towards the same direction to governance issues, poor asset quality, diversion of fund to
meet the common objectivity. the wrong entity , promoter's whimsical behaviour towards
compliance and governance, unnecessary luxury and
The major issues Banking industry is going to face is legacy throwing public fund towards unnecessary campaign and
platforms- the pessimistic views that is conventional earning name and fame without consolidating the financial
approach of customer services which continues to dominate position, suspected political funding, ironically Financial
indian banking industry particularly in the Rural or semi Regulator we have observed that they have cracked down
urban areas becoz of the backward mentality of staffs , they and intervene when situation goes out of control, fracas
are reluctant to embrace the new fast changing starts in the company, thing goes out of hand and
technologies which is off course imperative and the proportion, siting an example when YES BANK crisis started
disconnect needs to be wiped out at the earliest and some in 2017 govt. got ample time to rectify the situation, they
serious padding required to adopt and adapt the technology could have appointed Administrator that time only, Govt.
and innovation at the grassroot level in order to change and representative could be deputed that time only ,it has taken
invite the digital culture in the banks to leverage the better almost 3 years' time to supersede the board of YES bank
and personalized customer services and take the customer and ask SBI to infuse fresh capital through Equity
to the new height of faster response. investment, it should have foreseen before hence lakhs of
depositors and customers and associated people could avert
It requires rapid reshuffling in every stage of operation even this unwanted situation and severe crisis. We expect mature
taking some harsh steps needs to be taken to streamline and proactive approach of RBI to avoid such similar incident
and embrace the changing scenario . If required Govt. in future. People's trust is crumbled down towards our
should contemplate the idea of reforming the Rules and financial system requires to be restored.
regulations and amendments of acts will pave the fresh
energy and unshackled working culture in this critical Covid 19 Pandemic - The challenges in the Banking industry
moment of transformation. Banking Union happens to be is very much explicit apart from banking stock declined by
the biggest bottlenecks of change should be taken into 15 % which is major onslaught on the financial sector's
confidence in the changing process rather they also should image, future prospect and inclusiveness . NPA is supposed

42 | 2020 | JUNE | BANKING FINANCE